Llama Life Revenue, Valuation & Funding (2024)

hey folks my guest today is ring she's the founder of llama life after working in advertising in new york city she taught herself to code by watching youtube videos then built and bootstrapped llama life as a solo founder to 700 paying customers which we love it has since raised a precede round from high profile investor jason costianus let's jump into the story murray you're ready to take us to the top sounds good thanks for having me the life you had the life you're bootstrapping up paying customers then you say okay okay fine we're going to let them in we're going to let that we're going to let the evil and not always evil we're going to let the vc and why change paths yeah so you're right so bootstrapped it to 700 paying customers um that was kind of the original plan but it was a bit it was a bit serendipitous so i was building in public on twitter and someone from jason calacanis's team saw llamalife and they bought the product they really liked it and they dm'd me on twitter and they said hey we can see that you're bootstrapping have you ever thought about joining an accelerator program and you know i had thought about an accelerator in the past i've actually done a few startups before llama life and i did actually go the vc path um a long time ago not a huge amount it was a very very small check at the time for a different business and you know it's kind of been through that experience and this time i thought i'd bootstrap it but because it was jason calacanis a huge angel investor he invested in uber and calm and a lot of other huge businesses very early on i thought you know i'd take the conversation i'd take the call and we had a call i ended up like applying for their accelerator program it's called the launch accelerator it's a three month program in the us i'm based in australia but because everything's remote right now i was able to take part and i went through that program it kind of helped me think about llama life in a much bigger way you know i think that's what accelerated programs are for right it's how do you grow bigger how do you how do you grow quickly how do you scale quickly and i really like the vision that kind of evolved over time and that vision is to help people achieve calm focused productivity because nowadays there's kind of this false notion that we need to be you know working crazy hours crazy busy working all the time and i just don't believe that's the way forward i think we can still achieve productivity but do it in a calm way and a way that's good for our mental health and that's kind of what emerged out of the accelerator and i really want to see if i can make that vision come true and as a solo bootstrapped founder i thought it was going to be more difficult so i ended up raising money after the accelerator program closed around very very uh no actually not long ago like um two months ago two months ago so we're in i raised 690 k uh usd so that will give us a yep and so as i say and what was launch's model do they take six percent for 150 or do they take equity yes so they take six percent for a 100k usd okay so is that part of the 690 no that's on top of the 690. okay so before this before the 690 really yeah yeah so i guess with the accelerator you know the idea is to be able to let you work full-time on it so that's kind of what happened right as a solo founder i took the hundred k gave away six percent was able to work full-time on my business during the accelerator program which was three months and then after that you know at the end you do demo day so with demo day um actually didn't raise any money from demo day but it gave me some momentum and it let me practice doing my pitch like hundreds and hundreds of times and i ended up raising money after that but you know as you know raising money takes a while sometimes so i think it took about five months in total from you know when i first started to when the money actually hit the bank um did you end up i mean this is a this is a tricky time obviously well i mean it sounds like you closed before this sort of rocky period of the past month or so just before yeah yeah so you rate obviously the accelerator 100k six percent is what a 1.6 million valuation what valuation did you use on the seed round yeah on the seed round also as a pre-seed round um so it was 2.75 million pre pre-money oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview yep yep so caught like 2.2.5 posts something like that uh three point i would say like three point four post three point four sorry sorry two point five three two point seven five pre so it'd be like yeah two point two point five pre so the three point i can't do the match it's like trying to decide how much you sold you sold you sold like 15 15 something like that um probably more like 20 i think by the end of it yeah which is which is okay for pre-seed i think yeah um yeah i mean you do lose it's interesting we're talking about an app that's sort of about calm but the second you raise you got an accelerator and you go on the vc path i mean it is on it is growth at all costs it's like you've got to hit it and if you don't your your optionality is like nil it's very small so i mean i guess talk to me about before you made that switch 700 customers where were you in terms of revenue from those customers yeah so the revenue is still very small with the 700 because you know originally when lama life started it was a free app um so it's a web app and then we kind of went through different pricing models right so the first price was like four dollars one-time payment and that was it um it's it's grown over time so it's now at 50 annual subscription so that's quite a big difference um so when we're at 700 paying customers half of those half of those 700 were just one time payment so it's kind of hard to to kind of work that out but i can tell you where we're at now so we're at 950 paying customers so it's not that far off from where the 700 was and the mrr is at 18 about 1800 mrr um us dollars but we only started charging subscriptions about a year ago yeah because before before that it was just one-time payments or it was like free yep no this makes perfect sense so so um 1800 per month today one hundred dollars sorry twenty one thousand dollar run rate annually and that was up from about a year ago what were you up from i mean are you probably growing like crazy right growth rate wise growth rate wise we are growing twenty percent month one month gross mrr yeah yeah now look anyone listening's gonna go yeah but she's going from a dollar to six bucks it's 600 growth but still growth is growth right so growth is growth i think i think the other thing to think about is that you know there's different growth stories to tell and it depends on the type of business so we're obviously uh we're a b2c product we're a consumer product there's different ways to look at it and actually we're actually doing this right now thinking about this because you know when you when you raise money from a vc you need to report monthly right you need to provide your your you know what did you do every month your highlights your lowlights what's your run rate what's your revenue what's your growth and we're kind of thinking about like what's the story at the moment is it a revenue story that we want to tell so we do grow 20 month on month or do we want to tell more of a customer engagement story because it's a consumer app and i'm actually leaning toward the latter so right now a big heavy focus is analytics like how can we figure out what our engagement metrics are like are we going to be are we going to be tracking things like monthly active users probably more appropriate to do weekly active users or daily in this case and you know what's the engagement llama life is a tool that helps people focus so one of the things that we are looking at is maybe we look at number of focus minutes per month like is that the metric that we want to track and is that the metric that we want to grow every month because once you start raising money the goal is obviously you know can you put your business in a good position in order to raise the next round in 18 months like can you put it in a in an attractive position for investors and is that position about telling a gross story on revenue or a gross story around customer engagement so i'm actually leaning toward the customer engagement i think a lot of consumer apps focus on that versus revenue on the early days but mary so here's you're sort of in this very interesting spot because it's almost a problem that you have revenue because then people want to harp on you about how low the revenue is when really you should just eliminate the revenue and just focus on user and engagement growth you know yeah yeah it's it's no you you're spot on because i think when you're bootstrapping revenue is all it is like the number one focus yeah yeah you're only saying this because you chose to raise my advice exactly different if it was if you were still bootstrapping exactly and that's why this is interesting because when i was bootstrapping that was my number one focus right and there was actually a paywall on llama life so alarm life was a free trial and then it was completely paywalled and to access anything you had to pay for it that was the bootstrapped model and i think that makes a lot of sense for bootstrappers especially if you're a solo bootstrapper because you know do you want to support a large number of customers that are on free plans or do you want to support a smaller number who are actually paying for your product and are going to sustain your business over time so that's kind of the bootstrap way and that's kind of where i was thinking before i raise money now it's a little bit different you know we are thinking about potentially adding a free tier so that will open things up a lot we have a lot of students using llama life and they always email me saying it's too expensive for them we have a lot of people it's it's global from day one so we have a lot of customers in um countries like india as well i get a lot of emails from people from india saying hey the exchange rate is prohibitive you know in terms of using this being like though like the the this is not the if you're gonna go build a 100 million dollar revenue business it's not gonna be probably from selling today five dollar per month plans to students in india you know what i mean so it's interesting so i guess why haven't you pulled down the pricing totally i mean why is it still on the site are you nervous uh well actually as i said we're about we're thinking about introducing a free tier so look out for that um no yeah i mean you're on that you're on the right track that's that's kind of what we're thinking at the moment we just start we're in the process yeah cause that way that way your next round you don't have to defend some vc going well you don't have two million bucks of ar yet and then you have to worry about saying well we're not focused on ar we're focused on engagement metrics and look at how good our engagement metrics are yep yep that's right that's the interest it's very very interesting and pricing is such a tricky thing and i think the main thing is to think about like what is your number one goal right what is the thing that you're what is a metric that you're working toward and that you need to hit and then build the pricing around that whether it's a free tier or it's a paywall or you know etc how many folks are on the team today full time there's just two at the moment so i i recently hired someone at the start of this year so that's you know we're in may 2022 so she joined um in january she's focusing more on content community doing partnership deals and i'm doing dev design business everything else pretty much but we are hiring we are looking for another dev so full stack dev to kind of take some of that time uh alleviate some of my time as well so if anyone's uh looking to join an awesome business uh there you go emery if i ask you today what churn is how would you answer that yes a churn has typically been quite low four to six percent that said um this month that's monthly monthly month monthly mri churn four to six percent that said this month has been a little higher so we're now around eight percent and i actually tweeted about this couple of days back um what happened was um it's been one year since i launched subscriptions so the annual subscriptions the first annual subscription has started to tick over this exactly this month in may so we started to see some of the original customers um lapse there's a couple of reasons for that i mean there's pro there's going to be some natural attrition that's normal but there's also a couple other things so um credit cards have been expiring and people haven't renewed them and then we have we've had a lot of problems with payments in india because as you know like recent regulation in india has really cracked down on uh subscriptions so that's been hitting us quite um badly this month but it's around eight percent mri churn at the moment but that's high for us that's understood understood interesting well listen we're rooting for you thanks for making time for us in the meantime now let's wrap up here with the famous five number one what's the last book that you read oh last book uh well i'm reading atomic habits right now so i guess that's in progress number two is there a founder you're following or studying um you know i because i started in the bootstrap world i'm following a lot of the indie hackers i love damon chen uh he's building testimonials basically connecting collecting testimonials for b2b businesses yep that's a good one number number three what's your favorite online tool for building lava oh my gosh well i mean aside from llama life itself um i really like uh clean shot tape it basically let you take yeah clean shot it lets you take screenshots on your mac i probably use it like 20 times a day it's amazing number four how many hours i sleep to eat every night about seven okay that's good and what's your situation married single kids uh single no kids one dog nothing and one dog that count that's it all right and miranda do you mind me asking how old you are um i am actually in my 40s oh amazing okay great so we'll say 40. the reason i ask is because take us back to your 20 year old self with something that you wish that she knew oh god my 20 year self was a mess um something i wish she knew i would say um just stress a little bit less you know because i never knew what i wanted to be i would just say like don't worry you'll figure it out guys stress less it makes sense she's on llamalife.com a b2c app that helps you stay calm stay productive and stress less she's 950 customers on the platform today about 1800 a monthly requiring revenue she's just getting going which we love trying to figure out should i have a paywall should i not what should the free tier look like she's got plenty of runway to figure it out though just to raise 690 thousand bucks and a precede round to the 3.4 million post money valuation so we'll see what she does next mary thanks for taking us to the top great thank you for having me one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for 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